The World Bank is not using a Special Purpose Vehicle or requiring collateral arrangements as it did for prior Cat Risk bonds. I realize that this reduces transaction costs, but I'm worried. Do these new Capital-at-Risk Notes expose the World Bank's balance sheet to more risk than the 2009 and 2012 offerings? Maybe not, due to the terms of the swap.
Is there any precedent for this sort of financial transaction, i.e. not requiring collateral, by the World Bank?